OTTAWA — A day after proclaiming the economy “job one,” the Harper government insisted Thursday that Finance Minister Jim Flaherty’s newly disclosed health condition, along with the looming departure of the Bank of Canada governor, will not cause any economic hiccups for Canada.

Economists from some of Canada’s largest banks and think-tanks agree, saying they doubt the minister’s illness and the changing of the guard at the Bank of Canada will have any impact on the government’s handling of the economy or erode market confidence.

Yet, private-sector economists also quietly wonder if the upcoming federal budget will be Flaherty’s last as finance minister, even though he has vowed to stay on until the books are balanced. Political observers believe the health setback could be the impetus for Flaherty to leave politics before the next election and make millions of dollars on Bay Street.

After facing questions for months about his health and appearance, Flaherty’s office confirmed Thursday he is undergoing treatment for a serious, but non-life threatening, skin disease known as Bullous Pemphigoid.

The minister’s office issued a statement saying Flaherty has been taking a steroid called prednisone to deal with the dermatological condition – a blistering skin disorder that can cause lesions on the body.

Flaherty, 63, has been battling the condition for the last year. The side effects of the medication can include bloating, weight gain, redness in the face and sleepiness, as well as nervousness and anxiety. His officials, however, insist the skin disease and medication have not affected the minister’s ability to do his job.

But new questions have emerged in the past few days following a sluggish television interview he gave last week in Switzerland while at the World Economic Forum. The minister had a thick voice, appeared quite weary and was far less talkative than normal. Flaherty’s officials said the minister was simply jet-lagged.

Flaherty’s spokesman and the Prime Minister’s Office maintain the minister’s health challenges will not impair his ability to perform his duties or prepare a federal budget, which he is expected to deliver in late February or March.

“This treatment has in no way impacted Minister Flaherty’s ability to do his job, as he has been dealing with this health issue for nearly a year now while carrying out his duties as Minister of Finance, regional GTA minister and Whitby-Oshawa MP,” Dan Miles, Flaherty’s director of communications, said in a statement.

“The minister says the condition is clearing up and he is hopeful his appearance will return to normal in the near future. Minister Flaherty will continue carrying out his day-to-day responsibilities and will not be commenting further on his condition.”

Ian Lee, former banker and now assistant professor at Carleton University’s Sprott School of Business, said he wouldn’t be surprised if Flaherty leaves politics soon for the private sector.

Lee said he has taken prednisone to treat rheumatoid arthritis, and that “it just screws you up” because you gain weight and don’t sleep well.

While he’s confident Flaherty can continue to perform his duties, Lee wonders if the health challenge will cause the minister to rethink his commitment to stick around until the deficit is eliminated.

He believes it could easily spur Flaherty to exit politics and make millions of dollars sitting on boards of directors, especially with the government already having a plan to balance the books in the coming years.

“This may be the catalytic moment or experience that causes him to change his mind … He must be starting to think about cashing in his chips,” Lee said. “All the signs point toward leaving.”

The minister has plenty of help on what is the government’s most important file: the economy.

Prime Minister Stephen Harper regularly makes announcements on significant economic policies, while Flaherty is also aided by junior finance minister Ted Menzies, and Shelly Glover, the parliamentary secretary to the minister of finance.

A spokesman for Harper said Thursday “the prime minister wishes Minister Flaherty well and looks forward to continuing to work with him” on the government’s economic priorities.

Flaherty’s health troubles come as the Conservative government is trying to rein in a deficit, plan a budget and kick-start a growing yet sluggish Canadian economy.

The Bank of Canada and federal government are already looking for a new central banker. Mark Carney is leaving his job as Bank of Canada governor on June 1 to take over as the new governor of the Bank of England on July 1. His confirmation hearing is Feb. 7.

“While both Governor Carney and the finance minister have been key men at the helm of policy in recent years, we are confident that the available talent pool is deep enough to find replacements, if need be, to minimize any market concerns,” Avery Shenfeld, chief economist of CIBC World Markets, said Thursday.

Flaherty’s political opponents, who usually take a no-holds-barred approach in the House of Commons, wished him well and said they don’t anticipate any problems for the Canadian economy from the minister’s illness and the departure of the central banker.

“I have no reason to believe that either the condition that (Flaherty) has or the treatment he’s undergoing is going to detract at all from his public duties,” said interim Liberal Leader Bob Rae, adding that Carney has given ample notice to find a suitable replacement at the Bank of Canada.

Senior Parliament Hill reporter for the Ottawa Citizen, politics junkie, wannabe pro golfer and someone who has wordsmithed at newspapers in Ontario, Alberta and Saskatchewan. I've covered politics at... read more every level, including city hall in Ottawa and Calgary, the Alberta legislature in Edmonton and now back in Ottawa covering the Hill.View author's profile